Risk management plans are important for businesses of all types, but particularly for those that collect, utilize, and store consumer data. Consumer data, like location data, comes with a variety of valuable insights for businesses. However, this data can also come with levels of risk that need to be planned for to avoid potential negative impacts on your business. 

With ever-evolving legislation and consumer expectations surrounding location data privacy, it is imperative to have a robust risk management plan in place for handling location data. By implementing such a plan, your company can navigate this dynamic landscape while maintaining privacy-compliant practices consistently over time.

Although many consumers are willing to share their data with companies if it leads to personal or societal benefits, it is still essential to prioritize privacy-friendly practices when handling such data. In particular, privacy compliance is crucial because some location data may be generated at privacy-sensitive locations. Failure to implement strong data privacy practices can expose sensitive location data, potentially leading to significant financial and reputational costs for your company.

Sensitive locations refer to specific places where data collection has the potential to compromise consumer privacy and security. According to the Network Advertising Initiative, sensitive points of interest are areas where the associations of location information with additional information about that location that may reveal sensitive information about consumers, or information that the average person would likely consider to be private.

Some examples of sensitive locations include:

• Places of religious worship 
• Correctional facilities
• Places that may be used to infer an LGBTQ+ identification
• Places that may be used to infer engagement with explicit sexual content, material, or acts
• Places primarily intended to be occupied by children under 16
• Domestic abuse shelters, including rape crisis centers
• Welfare or homeless shelters and halfway houses 
• Dependency or addiction treatment centers
• Medical facilities that cater predominantly to sensitive conditions (such as cancer centers, HIV/ AIDS, fertility or abortion clinics, mental health treatment facilities, or emergency room trauma centers)
• Places that may be used to infer refugee or immigrant status, such as refugee or immigration centers and immigration services
• Credit repair, debt services, bankruptcy services, or payday lending institutions 
• Military bases

It’s clear that there are a vast number of locations considered to be privacy-sensitive, which underscores the importance of recognizing the potential risks associated with handling data collected from these locations. So, what exactly are those risks, and how might they cost your business?

One of the most significant and financially impactful risks of poor data handling is the potential exposure of sensitive location information. Without the proper privacy practices in place, sensitive consumer location data could be susceptible to misuse, which could expose your organization to negative press cycles, reputational harm, and lost revenue. These repercussions can have a lasting negative impact on your company, not only in terms of financial losses but also in terms of the long-term negative sentiment surrounding your organization following a breach or regulatory investigation.

For businesses that collect, store, or use location data, privacy-enhancing technology is increasingly important. This is what can help your company identify, flag, and filter out location data signals collected from sensitive locations to ensure privacy-friendly data handling. Technologies like this can keep up-to-date with newly-identified sensitive locations as well, so your company can always put consumer privacy protections first. By doing this, companies can reduce the costly risks that can come with lacking the proper privacy-friendly practices.

An effective risk management plan for location data handling starts with understanding the true cost of the risk to your business. Calculating these costs can be a challenge, but we’ve created a user-friendly risk calculator to help you better understand the potential costs associated with not utilizing proper privacy practices when handling location data. Our risk calculator will also allow you to compare this cost with the potential cost of developing and maintaining your own privacy-enhancing technology. Finally, this calculator will allow you to compare those costs with the cost of incorporating an outsourced, subscription-based solution, like our privacy-enhancing technology PrivacyCheck.

This is a great place to start if you are looking to build a better understanding of the risks and responsibilities that come with using consumer location data. 

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